October 29, 2017
Farming and Real Estate have a lot in common. You are probably familiar with the concept of planting and growing seeds. Real Estate Farming is no different. Real Estate farming means choosing one area of your city and focusing your marketing in that area.
You “farm” that area – planting seeds, and growing your business, just like you are growing vegetables. The idea with both is to have a harvest of food (or business!) that will last you all year long.
Start by asking these 5 questions, to be sure you choose the right farm area.
First, how many homes are there? What size should your farm area be? In real estate farming, size matters. You need to make sure the area is large enough to ensure a decent turnover, but small enough that you can build a name for yourself there without draining your budget. Keep in mind that you can always start small and grow your area as your time and budget allows.
Speaking of budget, you will need to have one. And not just for your money, for your time as well. Have you determined what you can afford? A successful farmer is likely writing checks long before they ever see a harvest or a return on investment. Determining your budget up front is crucial, so you can accurately plan your marketing efforts. You’ll also want to make sure that it’s a budget you can sustain for more than one full year.
Third – what are the turnover rates and sales trends for the area? Knowing the stats for the area is important. You’ll have to do your homework. How often are people moving? What is the average amount of time they stay? How quickly do homes sell? All of this information is going to help you make a decision about how large of an area to farm, or how many homes, on average, you might sell in the area on an annual basis.
Do other agents farm the area? Some would say that if another agent actively farms the area, you should steer clear. But the reality is, there may be room for both. What is the other agent’s market share? Out of 10 homes sold in the area, how many does he/she sell? That will tell you that there is still room for you or not. There is usually room for more than one farmer in an area, but you have to be willing to do something different to stand out. You’ll have to bring your own marketing style and be willing to think outside the box.
Do you actually like the neighborhood or community you are farming? This is a question that most of us don’t ask when choosing a farming area. You will be spending a lot of time there, getting to know the community like the back of your hand, and representing that area in your marketing. What do you like about it? How would you describe it to a buyer who asks “what is it like to live there?”
Once you have identified a farm area and done your research, let’s identify 6 best practices for making the most of your efforts.
Set goals. First - outline your specific goals. How many marketing touch points will you plan for? How much will you spend ? How many sales would you like to see come from your farm annually? You can adjust as you go, but it’s important to start with specific goals in mind.
Become an expert and be visible. Know everything there is to know about your farming area.
It’s not enough to just send flyers or put up signs. Participate in the community events. Door knock. Show up. Talk to people. Get to know them. Successfully farming an area means that you have to become part of the fabric of the community.
Give it time and be consistent. This is not an overnight thing. It takes time and persistence to truly own a neighborhood. Just as it takes time for seeds to grow, it will take time for you to see the results of your efforts. It’s a long term relationship and consistency is key to success.
Provide value. In order to keep front of mind, you’ll have to provide real value to your community, in the form of information and education. The best thing you can offer when you are door knocking or mailing info is something the homeowner couldn’t easily find on their own. Your expertise and your willingness to educate will set you apart.
Use tools and resources. Utilize tools and resources to keep your contacts organized and your marketing efforts coordinated. I love Canva for creating marketing materials, MailChimp for sending out awesome newsletters, and Contactually to organize all my contacts. Don’t forget your postal service does targeted neighborhood mail drops at a fraction of the cost of a regular stamp, and use Pinterest to find super fun pop-by ideas to shake things up.
Plan for the future. Lastly, the most important step is to plan for growth. You don’t have to do it all at the start. Allow for your budget and farm area to expand as you start to see results. As you go, continue to revisit your goals, measure your results, and adapt the plan as needed.
Remember, real estate farming is investing in the future. Just as you cannot eat what you planted yesterday, you also cannot expect to immediately make money on your farm area. But the longer you stick with it, the more successful you will be.